National Grid, NRG Reach Two-Year Agreement

March 10, 2013

DUNKIRK - An agreement has been reached that will keep the NRG Energy Inc. power plant in Dunkirk running - at least partially - for the next two years.

The agreement between NRG and National Grid will keep one of the two generating units currently in production operating through May 31, 2015. NRG announced the deal Wednesday.

Beginning June 1, NRG will begin operating one unit of the facility - a decrease from the current two - through May 31, 2015. David Gaier, NRG spokesman, said the contract is a good deal since it keeps the Dunkirk plant in operation though employment levels will decrease from 82 to 68. However, only a few positions will be impacted because of transfers, attrition and existing vacancies that will be eliminated. The contract needs approval of the New York State Public Service Commission.

Article Photos

NRG and National Grid reached an agreement to continue running one generating unit through May 2015.P-J file photo

"This is good news, as it keeps the station open and preserves jobs," Gaier stated. "We'd like to especially thank NRG's Dunkirk employees, and the entire Dunkirk community for their support. We'd also like to recognize Sen. Cathy Young and Assemblyman Andy Goodell, who have worked tirelessly on behalf of the Dunkirk station."

Currently, NRG is running two units, each of which can generate about 100 megawatts of power from the Dunkirk plant. The company will begin mothballing unit one in June.

Gaier was asked if the agreement meets reliability needs.

"This Reliability Support Services contract meets the previously identified reliability need for the period after May 31 of this year," Gaier replied. "NRG, among others, responded to an RFP from National Grid, which ultimately resulted in this contract, which was filed with the PSC yesterday. The contract does require approval from the PSC."

Stephen Brady, National Grid's media relations manager, was asked about the agreement.

"The agreement reached for service through mid-2015, like the shorter one that expires this May, is a step in a process to help assure continued reliable service for customers," he replied. "This is necessary because any long-term solution will take time to implement.

Gaier also said NRG is continuing its push for a conversion from coal to a natural gas combined-cycle plant.

"We'll be submitting our Dunkirk repowering proposal to National Grid on March 19," he explained. "On April 22, Grid will file its recommendations on our proposal and its own transmission alternative with the PSC.

Assemblyman Andrew Goodell was clear on his preferred outcome of the upcoming PSC decision.

"The issue will be whether or not we invest in a new plant which will cost over $.5 billion, but will produce electricity in the most efficient way. It will be the most efficient natural gas plant in the nation," he said. "So it's a major capital investment with the lowest production costs in the nation or we'll upgrade the transmission lines and purchase more expensive power from out-of-state or Canada. When you look at the big picture you'll realize it makes a lot more economic sense for the state of New York to invest in our own generating capacity to have a highly efficient facility in Western New York and to export surplus power, rather than to import power.

"It's good news that the plant will be open at least at some level for the next two years. Hopefully, well before then we'll be in a situation where we're moving forward with a complete repowering."

Dunkirk Mayor Anthony J. Dolce was of mixed emotions on the announcement.

"I think the ideal situation would have been that the study would have shown that two units were needed, but at least this way you can take away the stability of knowing that you'll have at least one unit operational for the next two years," he said. "We'll wait and see, we're still optimistic. The push to, I guess, allow the conversion to gas is ongoing, so we remain hopeful."